Oil giant Royal Dutch Shell (NYSE: RDS-A) this morning announced forecast-beating earnings for the first quarter of 2012, as higher oil prices outweighed the impact of lower U.S. gas prices, which slumped to their lowest quarterly average in 10 years.

The Anglo-Dutch group -- the first of Europe's oil majors to publish results this season -- reported an 11% increase in headline earnings. Excluding one-offs, the rise was 16%, as earnings gushed to $7.3 billion from $6.3 billion a year earlier. This was above consensus analysts' expectations of $6.7 billion.

The market has applauded the results, pushing the shares up more than 3% to 2,260 pence in early trading.

Operations and outlook
As well as benefiting from higher oil prices -- Brent crude averaged $118 a barrel in the first quarter, compared with $105 in the same period last year -- earnings were boosted by an improved operating performance and increased upstream volumes.

"We are implementing our strategy by improving near-term performance, delivering a new wave of production growth and maturing the next generation of growth options for shareholders," said chief executive Peter Voser.

Shell generates bucketloads of cash -- $13.4 billion this quarter alone -- and is investing heavily in new energy projects. Capital expenditure for the quarter was $7 billion. In its latest move, the company is looking to take a prime position in the race for east Africa's gas reserves, with a recommended $1.8 billion offer for Mozambique- and Kenya-focused exploration firm Cove Energy (LSE: COV.L).

Monster dividend
A huge chunk of Shell's annual cash generation goes to shareholders by way of the dividend. In fact, the company was the UK's biggest payer last year, its distribution representing 10% of the entire market payout of 68 billion pounds.

As previously signaled, Shell has declared a first-quarter dividend of $0.43 per share. The dividend will be paid on June 21, and the ex-dividend date is May 9. Shareholders won't know the sterling conversion rate until June 1, but at the current rate of around $1.60 to the pound, it's getting on for 27 pence per share.

Ahead of this morning's results, analysts were forecasting a 110 pence dividend for the full year, giving an attractive yield of 4.9%.

Low-valued shares
Shell's shares have been on the slide since the start of this year on macro concerns about oil supply and a potential loss of momentum in earnings growth for the oil majors. Forward price-to-earnings ratios have become low across the board, and even after the uplift in Shell's share price this morning, the forward P/E is still less than eight.

Shell's dividend yield is about the same as that of rival BP (NYSE: BP), and while BP has a lower P/E, both companies seem a good value to me, especially for income seekers.

As Shell's chief exec says, in the near term there will be volatility in energy prices as a result of economic and political events, but in the long term "energy demand fundamentals are robust."

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